Other major market geographies also continue to struggle with many of the aforementioned issues at a less severe scale.
Summary Polysilicon market is structurally imbalanced due to China tariffs, and pricing is likely to collapse. In spite of the price drop, Daqo New Energy remains a strong player due to its superior cost structure.
Polysilicon market, ever since the Chinese introduced tariffs on US polysilicon makers, has been turbulent and bifurcated. REC has lobbied extensively to get the tariffs removed, but having failed to do so, the Company shuttered much of its polysilicon production capacity in The Company continues to lobby to protect its interests, but there is currently no end in sight to the tariff regime as there is a new trade team in place in the form of Trump administration.
Unless specified otherwise, all the images are from REC Silicon investor presentation. Elsewhere, Daqo continues to benefit with improved profitability and ongoing capacity expansion.
There are other polysilicon companies, such as TBEA, that are impacted but are not covered in this article as there is no compelling investor interest in these companies. The tariffs caused bifurcation in the polysilicon market since the economic supply in China, i. The shortage of supply has increased polysilicon prices inside China, causing some of the more expensive and likely defunct supply to become economical.
While this dynamic increased the supply within China, the tariff-free supply is still not at a level where China can rely entirely on domestic sources.
One of the less well understood aspects of polysilicon business is that there are long lead times in reaching production status from a greenfield 2 to 3 years. This delay makes investments risky, and many companies are not willing to take the risk that there will be an opportunity to make money after the multiyear gestation period.
Given the above dynamics, and due to the continuous growth in solar PV demand, the amount of polysilicon that China imports continues to increase image below. Consequently, polysilicon prices inside China have been increasing unlike the price implosions seen in the rest of the solar supply chain.
But the price strength is unique to China. Polysilicon prices outside of China, on the other hand, have been depressed as the supply outside of China exceeds demand.
The high prices in China and the blanket of protectionism have meant that there are several Chinese companies investing in growing polysilicon capacity in China. The following image shows the currently known planned capacity additions for the near future.
In this case, there are three reasons why the appearances are deceptive. Chinese companies, especially state-owned ones, tend to be irrational and can add capacity faster than preliminary indications; i.
The solar wafer manufacturers are going through a fundamental change from an old slurry-based process to a modern diamond wire process. The diamond wire process leads to a significantly lower level of polysilicon usage. The move to diamond wire and the impact is currently difficult to forecast but is decidedly negative.
With inside China solar PV module demand forecasted to reduce dramatically due to revised China tariffs, the capacity is coming online at an inopportune time. In an environment like this, ASPs can collapse anytime, and being a low-cost supplier remains the key to being a viable player in the industry.
Even as the China ASP bubble burst due to the H2 oversupply situation, we continue to find Daqo as the company most well positioned to do well in the industry due to its low-cost structure.
Our View of DQ: Avoid Before it is here, it is on the Renewable Energy Insights subscriber platform.The global polysilicon market is estimated to reach USD Billion by at a CAGR of % from to The main objective of the study is to define, describe, and forecast the polysilicon market on the basis of form, end-use industry, and region.
We forecast a market volume of 38, MT in A couple of Chinese polysilicon producers are trying to establish themselves as suppliers of electronic- The Polysilicon Market Outlook provides comprehensive, detailed and up-to-. New solar installations will exceed 95 GW in , according to the latest forecast of Bernreuter Research.
The polysilicon spot price will fall again. Daqo's new production capacity is anticipated to improve manufacturing efficiency and reduce their production cost of polysilicon by roughly $/kg which will help offset trade tariffs and lower.
PV Polysilicon and Wafering Industry – Supply Chain and Market Updates Marcus Lentz Sr. Industry Analyst the markets are forecast to grow on more stable prices and higher shipments.
• Very large increase in polysilicon and wafer capacity since has led to. According to a briefing paper released by the Asia Europe Clean Energy (Solar) Advisory Co.
Ltd. over the weekend, Friday’s public policy notice abolished the GW target established by China.